Amazon buildings help fuel skyrocketing warehouse prices in Las Vegas Valley

One of two industrial buildings recently sold by developer CapRock at 5802 East Tropical Parkwa ...

A warehouse isn’t exactly the most exciting piece of real estate. As one developer put it to me years ago, it’s just four walls with a lot of air in between.

But these facilities make up a heated segment of Southern Nevada’s real estate market as builders put up waves of projects and landlords pay big money to own them.

Amazon has been a key reason for the growth — and if you want a glimpse at the e-commerce giant’s impact on local real estate, and how the industrial market overall has surged, venture near the Las Vegas Motor Speedway.

Developers have been packing the Speedway area with big warehouse projects lately, and at least three Amazon facilities there have traded hands within the past five years. Amazon’s buildings all sold a year or so after they were built — and the prices have skyrocketed.

Most recently, a Boston investment firm acquired an 857,000-square-foot Amazon warehouse for $226.4 million in April as part of a two-building acquisition along Tropical Parkway off Interstate 15, property records show.

By comparison, in late 2017, an 813,000-square-foot Amazon facility sold for $73.4 million as part of a two-building purchase along I-15 at Lamb Boulevard.

Amazon facilities are by no means the only warehouses to trade hands lately in Southern Nevada, and the retail powerhouse is one of many companies to occupy new industrial space in the valley.

But Amazon’s expansion in the region, and the prices investors have paid to own its buildings, highlight a rapidly growing sector of commercial real estate — a market fueled in no small part by an accelerated shift to online shopping that has generated demand for distribution space.

Cushman & Wakefield broker Greg Tassi, an industrial property specialist, said investor activity overall is “extremely active” for Southern Nevada warehouses.

He has seen record-breaking sales prices and noted that land values have accelerated.

“Industrial’s kind of a darling right now,” Tassi said.

Amazon, which has hundreds of distribution facilities in North America, boasted 13 operations sites in Nevada as of last fall.

Some are right near each other. Amazon has multiple big buildings near the Speedway, and in Henderson, it has a 147,000-square-foot distribution facility up the street from an Amazon facility that spans more than 600,000 square feet.

Amazon declined to comment for this story.

Overall, more than 8 million square feet of industrial space was under construction in the Las Vegas area in the first quarter, up from 5.45 million during the same period last year, and the market’s vacancy rate fell to a record-low 1.7 percent, brokerage Colliers International reported.

Southern Nevada also logged $608.4 million of industrial investment sales in the first quarter this year, on pace to top 2021’s sales volume of $1.6 billion, according to Colliers.

Of course, not every area of commercial real estate is this heated. Brick-and-mortar retail got wobbly a while ago as people spent more time shopping on websites such as Amazon, and the office market still faces questions more than two years after the pandemic sparked widespread work-from-home arrangements.

But as long as people keep buying things from the comfort of their couch, don’t expect Las Vegas’ warehouse market to hit the brakes anytime soon.

Remember, that stuff gets shipped to you from somewhere.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.